RealTime IT News

Media Giants Buy Into the Net (cont.)

Willing risk-takers

Yet big media companies are willing to face these risks for the opportunity to dominate the world of new media.

"The Internet for Disney is mission critical," says Jake Winebaum, chairman of Disney's Buena Vista Internet Group. "It is at the core of a lot of our strategies."

For example, families planning vacations to Disney World or Disneyland soon will be able to make all of their travel arrangements via Disney's Internet sites. That keeps the Disney brand name in front of the customers and gives Disney a percentage of the travel purchases.

What sets Disney apart from America Online, Yahoo and Excite, Winebaum says, is that his company directly controls massive amounts of potential Internet content. While the other services have partners providing news, such as Reuters, Disney can draw on ABC News, which it owns.

"We can do a lot of clever things," Winebaum says. Not only will Disney know what its Internet viewers are looking for, it knows exactly what is in the Disney stockpile of content.

All of this builds the loyalty that all of the Internet companies believe is key to future profits. The portal site that gets people to keep coming back --and gives them what they want without having to send them elsewhere on the Internet--can charge higher prices for advertising and win bigger commissions from online sales.

"These are early chess moves by traditional media companies to get their foot into the next medium," says Ron Rappaport, an analyst with Zona Research. "A company like Disney can't afford to start taking steps two years from now."

By David Lieberman, USA TODAY

Contributing: Doug Levy, Kevin Maney, Steve Rosenbush and Julie Schmit